Small Business Tax Deductions & Write-Offs (2023)
This article is a list if items that several groups of small business mastermind groups came up with from my poll question, what do you deduct or write-off in your woodworking, CNC milling or Laser etching small business?
It feels wrong to be writing about taxes, but here I am!
First off, let me say, I am NOT an accountant, nor do a I really know tax law. I have someone for that! (Royce cut wood – in best Cro-magnon man voice)
Secondly, this is just a list of opinions. What other people do. That (as a bit of a disclaimer) doesn’t necessarily make it legal. Check out the list, spur some ideas about what you are or are not doing, and then figure out if it makes sense for you to do it.
What is a Tax Deduction?
A Tax Deduction is the amount you can deduct from your taxible income to lower the amount of taxes you will have to pay. An example for my small business is that I could deduct the CO2 Laser I bought this year because it is specifically a tool for my business. The US tax law about deducations can be found HERE.
What is a Tax Write-Off?
Well, unfortunately, a Write-Off is just another name or slang for a Tax Deduction! So stick with the concept of deductions as we work our way through this!
Should we talk about this? What is a Tax Credit?
Unlike a deduction, a Tax Credit comes straight off the money you owe. It directly reduces your taxable income. The US tax information about small business credits is found HERE.
Common Tax Deductions
Again folks, I’m not a CPA or accountant. Didn’t study Tax Law. This is a list of items from several Mastermind Groups I belong to, the validity of the items is not verified so look into the law before you jump in and claim your Chihuahua as a security expense.
General Small Business Tax Deductions
- Business use of your home (you can deduct a portion of you house if used as office, storage or shop space).
- Portions of your vehicle fuel (if used in business)
- Cell phone
- Internet/WiFi
- Training
- Insurance
- Portions of your Electricity
- Billing Software
- Accountant Fees
- Some Meals
- Trade Shows
- Advertising
- Subscriptions/Software
- Repairs
- Office Supplies
- Business Cards
- Promotional Items
- Licenses
- Shipping Materials
- DONATIONS
Woodworking Small Business Tax Deductions
- Portions of your shop bill
- Tools
- Portions of your electricity
- Notebooks/Paper
- Sandpaper
- Glue
- Nails/Brads/Screws/Biscuits/Dominoes
- Dust Collection
- Trailer
CNC Small Business Tax Deductions
- CNC machine
- Computer
- Purchased Files
- Bits
- Dust Collection
- Clamping Material
- Materials (Wood, Acrylic, MDF, Aluminum)
- Expendables
- Hoses
Laser Small Business Tax Deductions
- Laser
- Computer
- Purchased Files
- Tubes
- Lenses
- All Supplies
- Rotary Devices
- Chillers
- Distilled Water/Coolant
- Materials (Wood, Acrylic, Glasses, Tumblers, Leather)
- Expendables
- Mouse
- Hat/Leather Heat Press
Wrapping this up, I kind of want to reiterate that this is just to get you thinking about where you are losing money and not specifically advice. I am not an accountant, am not classically trained in tax law, it’s just me and a bunch of other Wood/CNC/Laser workers sharing thoughts. Please take this and share it, and comment if you have any other big items about Small Business Tax Deductions.
Make sure to check out the rest of my website and blog! My store has many of the common items I personally use and the WHY behind it.
Have a great one!
Royce
Hill Country CNC & Woodwork
Hill Country CNC & Woodworking is an affiliate marketing business, but it is one with ethics and morals. We only promote the items that we use in our daily business. Let’s help each other! I will give you my experience (and discounts sometimes) and you can help me grow.